Glencore, Ramaphosa unveil Optimum bid

[] — A CONSORTIUM consisting of Glencore, the Swiss commodities trading group, and businessman Cyril Ramaphosa, has unveiled terms of a R34 per share bid for South Africa’s sixth largest coal producer, Optimum Coal Holdings.

Still termed a general expression of interest, rather than an outright offer, the bid is equivalent to R8.5bn, some R500m above Optimum Coal’s current market value. Shares in Optimum have gained 34% since August 8 when they were trading at R24.60/share.

At the foot of its announcement to the JSE, however, Optimum Coal said it had received “an alternate offer to acquire a controlling interest in Optimum”. It added that the expression of interest provided for certain pre-conditions to be met before a firm intention to make an offer was made.

“The Board will continue to engage with the Alternative Party following publication of this announcement,” it said.

In its announcement, Optimum Coal said the Glencore/Ramaphosa consortium had first approached the key empowerment groupings in the company with contractual offers to buy their shares.

These groupings included Warrior Coal, which owns 13.7% of Optimum Coal; Micsan (owned by Optimum Coal CEO, Mike Teke) which owns 7.5% of the coal producer, and Kwini Mining (10.3%).

Including the 14.1% of Optimum Glencore already owns as of a deal concluded on Wednesday, the consortium has either finalised or made approaches over nearly 44% of Optimum’s shares.

However, in acknowledgement of Optimum Coal’s black-controlled status, both Micsan and Warrior Coal – in line with the consortium’s wishes – would not accept the offer. An additional 50 million shares held by employee trusts would also remain unaffected by the likelihood of a general offer to shareholders.

In an further effort not to disturb the empowerment status of Optimum – which was created by BHP Billiton in 2007 expressly for empowerment – Mike Teke would remain CEO of the company, Optimum Coal said in its announcement.